Staff at Ucas deal with calls from anxious students about university places after receiving their A-level results. Photograph: Sam Frost

This week, the deputy prime minister, Nick Clegg, said that it was a government priority to tackle a "poverty of opportunity" in the UK. Presumably he meant, at least in part, the 200,000 applicants who will not have the opportunity to enter higher education because of an arbitrary government cap on the number of places, or perhaps the estimated 1 million young people who are predicted by labour economists to be claiming on the dole by June 2011.

A perfect storm has gathered around this generation and ministers must make clear what on earth they expect young people caught in this to do and how they propose to enact their duty to help them.

Education is possibly the greatest driver of social mobility and that Clegg recognises a poverty of opportunity for those lower down the income scale is to be welcomed, but his words do not chime with the government's approach. Indeed, savage cuts to education and training budgets, the axing of the future jobs fund and the removal of education and employment guarantees for young people do not bode well for my generation or our prospects. Evidence shows that periods of youth unemployment leave permanent scars on the lives of those affected, and on our economy and society.

What we need now is not ministers' hollow congratulations on A-level results, patronising reassurances that things will be OK or platitudes about all the other things they could do; it is abundantly clear that young people face a bleak future – it is no consolation to those who have had the door slammed in their faces. Something must be done and it is quite clear that it can be. The government now has the opportunity to find genuinely imaginative, fair and sustainable alternatives to the problems staring us in the face.

Ministers must resist the urge to pander to the pub logic that too many people are going to university. Our stalling graduation rates have already left us foundering behind Ireland, the Netherlands, Sweden, Japan and Slovakia, even before arbitrary caps on student numbers were imposed. And the UK lags behind OECD averages in its public investment in higher education, spending 20% less than France and 10% less than the United States. Investment brings multiple returns.

It is quite true that university is not for everybody and that other routes to employment such as apprenticeships are just as valid and need continued expansion. However, apprenticeships have long been oversubscribed. BT received more than 100 applications for each of its apprenticeship places and British Gas received more than 100 applications for every gas-fitter apprenticeship, more than twice the usual ratio. The figures exceed Oxford University's 17,000 applications for 3,000 undergraduate places. It is one thing to tell someone to do an apprenticeship, but quite another to find one, and the government can make employers take more responsibility to provide opportunities.

The limp encouragement of students to reapply next year or, worse still, "aim lower" is also uninspiring, or worse, soul-destroying. Successive governments have used the ruse of promising "tomorrow" to deflect the problem, creating a backlog of well-qualified and ambitious university applicants who each year make the scramble more intense – and without proposing a long-term solution.

There are clearly serious issues with a funding system that is unable to support the hundreds of thousands of applicants who have made the grade, and leaves a quarter of applicants without a place. The discredited system of top-up fees, which the business secretary Vince Cable described as a "poll tax", exploits applicants' limited options by heaping an estimated £25,000 debt on top of the significant pressures they already face.

The encouragement to do part-time degrees is also hollow, with limited places and few employers willing to accommodate the juggling of work and study that courses require. The funding for part-time students is also one of the greatest injustices in the funding system – fees are unregulated and paid upfront, while almost no student support is available.

Ministers must introduce a fair, progressive and sustainable funding alternative that supports rather than penalises students and ensures that those graduates who earn more contribute more back to higher education. It cannot be fair that, as is the current state of play, a social worker contributes the same as a corporate lawyer or city banker, who can fulfil their financial obligation in a year or two, while those who take time off to have children or to care are left with a debt around their neck. We are glad the government has recognised this and hope that Cable delivers on his objective of delivering a system that is fairer for students – we will judge them on it.

I would not dare predict what will happen if my generation finds itself to have been lied to, betrayed and abandoned to sink or swim. But the experience of the 1980s makes it starkly clear what happens when governments fail to invest in its future. As youth unemployment hit 1 million during the recession of the early 1980s, it provoked a national crisis and riots, creating permanent scars on the fabric of our economy and society.

Clegg would do well to use his time at the helm to turn the sinking ship of youth opportunity around before it's too late for us. If he fails to do so and bails out on us, it will be left to us to do it ourselves before we are sold down the river.